StPetersburg Corporation
Use the Information Obtained from the Comparative Financial

St.Petersburg Corporation
Use the information obtained from the comparative financial statements included in the St.Petersburg Corporation's 2018 annual report that is presented below to answer the questions that follow.All amounts are in thousands of dollars.
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$\begin{array}{lrr}&\text { Dec. 31, } 2018&\text { Dec. 31, } 2017\\\text { Total assets } & \$ 800,000 & \$ 975,000 \\\text { Total common stockholders' equity } & 405,000 & 578,000 \\\text { Total stockholders' equity } & 504,000 & 702,000\\\\\\&\text { December } 31\\\text { FOR THE FISCAL YEARS ENDED }&2018&2017\\\hline\text { Interest expense, net of tax } & 5,000 & \$, 700 \\\text { Interest expense } & 6,100 & 5,800 \\\text { Income tax expense } & 22,600 & 32,600 \\\text { Net income } & 110,000 & 27,000 \\\text { Common dividends } & 12,600 & 7,200 \\\text { Net sales } & 2,667,600 & 1,971,000 \\\text { Preferred dividends } & 9,000 & 14,400\end{array}$ ​
-Refer to the financial information for St.Petersburg Corporation.
Required
During 2018,has St.Petersburg successfully employed favorable leverage based on the average cost of capital? What action should the company take?